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Unit Two Scarcity
Unit Two Scarcity
ESSENTIAL VOCABULARY
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9. Face v – to come face to face with a difficult situation or problem one has to deal
with – стикатися, поставати перед. Syn. to be faced with.
10.Forgo v – omit or decline to take (something pleasant or valuable); go without –
відмовлятися, утримуватись від чогось. Syn. to refuse, to give up.
11.Increase v – to make or become greater in size, number, amount, value, degree,
price, etc. – збільшувати, зростати. Syn. to go up, to rise. Ant. to decrease, to lower,
to reduce.
12.Individual n – a person, considered separately from the rest of the group or society
that they live in – особа, людина. Syn. a person. Individuals – окремі особи, люди.
Syn. people.
13.Limit (to) n – a point that may not or cannot be passed – межа. To set a/the limit to
– встановлювати межу.
14.Limit (to) v – to stop something going beyond a particular point – обмежувати.
15.Opportunity n – a favourable, appropriate, or advantageous chance or prospect –
слушна нагода, сприятлива можливість. Syn. a chance, a possibility.
16.Option n – a choice one can make in a particular situation – вибір; право вибору.
Syn. an alternative, a choice.
17.Power n – the right to do something – право, повноваження. Borrowing power –
кредитоспроможність, taxing power/power to tax – право оподаткування. Syn.
authority.
18.Satisfy v – to cause someone to be happy from some desire or need by supplying
what he desires, or needs – задовольняти. Syn. to meet.
19.Scarce adj – being insufficient or in limited supply to meet the demand – рідкісний;
що рідко зустрічається; дефіцитний; недостатній. To be scarce – бути в
недостатній кількості. Syn. limited.
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20.Value n – the importance placed on something by an individual – цінність;
вартість. Forgone value – вартість, від якої відмовляються. To have value –
мати цінність/вартість. Syn. cost.
Text
The older we become, the better we understand that we can’t have everything. If we
spend more on lunch we have less to spend on dinner. If we live in the country, we enjoy
the beauties of nature but we spend more time to get to university or work. If a business
produces advertising materials, it can’t publish scientific journals with the same
resources. If a government spends more on modern medical facilities, it has to limit
costs on improvements of roads. So, it means that everyone through their lives has to
make choices from among the things they would like to have.
Most of the things we want or need are goods and services. Economists call them
economic goods since they are scarce and have value to people. Other goods are not
scarce – air, seawater, and sunshine – and called free goods. They are useful to people
and available at no cost.
Since most of the things are scarce all economic units, namely, individuals, families,
businesses and governments, have to choose as to how to allocate and use them. Choices
made by individuals and families depend on the size of their personal income, savings,
wealth and ability to borrow. Business enterprises and firms, in turn*, are limited by
their profits, savings and borrowing power, and governments by their taxing and
borrowing power.
The necessity to make a choice results from the problem of scarcity of available
resources. For most people, scarcity is a fact of life. Scarcity means that individuals as
well as societies want more than is available. If people desired nothing, there would be
no scarcity. If resources were great enough to produce more than anyone desired, there
would also be no scarcity. Economists say that there is no limit to the amount and kinds
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of things that people want but there is a limit to the resources, available to satisfy
unlimited human wants. Thus, the problem of scarcity faces all people, businesses,
governments.
Having limited financial resources school leavers can choose a full-time or part-time job
as they can’t afford to get a university degree*. Business owners cannot hire all the
workers and buy all the equipment and raw materials they require. Governments face
some scarcity of finances despite their power to tax. Therefore, scarcity forces all levels
of decision makers*, from individuals to society, to do their best to get the most from
what they have.
The essential sense of scarcity is that everything we do has value. When you are doing
one thing, you are using time and resources that cannot be used for the next most
valuable thing you could have been doing*. The cost of doing more of one thing, then,
is the value that is sacrificed by doing less of something else.
Economists refer (посилаються) to the value that is forgone every time we do
something as opportunity cost. In fact, all costs are opportunity costs. We commonly
(звичайно,банально)think of cost as the money we spend to obtain something. But
spending money on one thing is giving up the opportunity to spend it on something else.
For example, you have been dreaming of buying a windsurfing and at last you have
accumulated enough savings to purchase it. But hydro cycle has become a thing of your
dream, too. But you cannot afford to purchase both desired things as you simply don't
have enough resources, namely, money. To the economist the choice you will make is a
trade-off. Trade-off means that the decision to have one thing is, at the same time, the
decision not to have something else.
Let's consider (розглянемо) the cost of acquiring (здобуття) university education.
Many school leavers think about going to university for four or five years. Obviously,
the cost of tuition, the cost of books and different supplies, and the cost of living in a
hostel represent the money cost of going to university.
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If a person does not go to college, then he or she will probably find a job instead.
Economists describe the money that those who choose university might have earned
(заробити)during their years of study as forgone earnings, but not the money spent on
tuition and books. Thus, the opportunity cost of going to university is the goods and
services represented by the money cost of the education, plus the value of the forgone
earnings.
The cost of doing something often has nothing to do with spending money. For example,
if you gave up the option of playing a computer game to read this text, the cost of
reading this text is the enjoyment you would have received playing the game. Most of
economics is based on the simple idea that people make choices by
comparing(порівнюючи) the benefits of options and choosing the one with the highest
benefit.
But there are two sides of the coin of opportunity cost. One is forgone value resulting
from scarcity, and the other is opportunity. There would be no opportunity costs without
opportunity. If there were only one thing you could do with your time and talents, there
would be no cost of doing it. The larger the number and the more valuable the
opportunities you have, the better this increases the cost of the choices you make.
So, the problems of scarcity, trade offs and opportunity costs are the main economic
issues that any economic unit faces.
We as individuals and as a society are faced with scarcity (of raw materials and financial
resources, of goods and services, of time, and so on) in relation to our ever-growing*
needs and wants. It is economics that helps make our choices (a new car or tuition fees,
more hospitals or more highways, more free time or more income from work) and gives
a way of understanding how to make the best use of available resources to achieve our
aims.
COMMENTS
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in turn – в свою чергу;
a university degree – університетський диплом;
decision makers – особи, які приймають рішення;
you could have been doing – ви могли б робити;
ever-growing – постійно зростаючий.
Exercise 1. Read, translate into Ukrainian in written form and memorize the definitions
of the following economic terms and concepts.
1. Economic goods: Any good or _____________________________________
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gains by selling something, or from _____________________________________
doing business in a particular period _____________________________________
of time after the production costs have _____________________________________
been met. _____________________________________
8. Resources: something that a _____________________________________
country, person, or organization has _____________________________________
and can use to achieve its/their goals. _____________________________________
9. Savings: the sums of money saved, _____________________________________
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scarcity __________________________________
5. for most people
6. to satisfy unlimited human wants
7. all the equipment and raw materials
8. the essential sense of scarcity
9. the value that is sacrificed
10. to purchase both desired things
11. she will probably find a job
12. the value of the forgone earnings
13. by comparing the benefits of options
14. in relation to our ever-growing __________________________________
needs ____________________________________
15. the best use of available resources
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16.плата за навчання
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Exercise 5. Copy out from the texts the sentences containing the following words and
word-combinations and translate these sentences into Ukrainian.
1. a business produces
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2. all economic units _____________________________________________________
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3. there is a limit to _______________________________________________________
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4. scarcity forces ________________________________________________________
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_______________________________________________________________________
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5. by doing less _________________________________________________________
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6. to have one thing ______________________________________________________
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7. the money cost of the education __________________________________________
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8. with the highest benefit _________________________________________________
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_______________________________________________________________________
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9. the choices you make __________________________________________________
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______________________________________________________________________
Exercise 6. What economic terms given in the text do the following definitions refer to?
B
1. a) Anything provided by nature or people that can be used in the
characteristics.
4. d) A limit to the supply of production resources or consumer goods
consumption.
Exercise 7. Find in the box the English equivalents to the words listed below. More
than one is possible.
1.вартість (2)
2.вибір (3)
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3.вигода (2)
4.витрати (2)
5.відмовитися (3)
6.господарська одиниця (2)
7.задовольняти (2)
8.зменшувати (2)
9.кредитоспроможність (2)
10.люди (2)
11. намагатися (2)
12.недостатній (2)
13.особа (2)
14.підприємство (3)
15.право (2)
16.право оподатковувати (2)
17.обмежувати (2)
18. стикатися (2)
19.щодо (3)
Exercise 8. Replace the words or word combinations in bold type with their synonyms.
1. The cost of any choice is the option that any business unit gives up.
2. The opportunity cost of choosing one alternative is the value given up by not having
an advantage of the next best alternative.
3. For most people, the scarcest resource they face is time.
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4. All individuals, business firms and business enterprise, nations and governments are
faced with, scarcity one way or another.
5. Since time and resources are scarce, we must give up one opportunity in order to get
a benefit from another many times each day.
6. Since all available resources are limited in relation to all of people’s wants and needs,
people and nations have to come to decisions as to what goods and services they can
afford to buy and which ones they must forgo.
7. Productive resources that are used to satisfy one want cannot be used to satisfy
another at the same time.
8. Many things in life are scarce, and much of economics is concerned with the
problem of scarcity.
9. The opportunity cost is measured by what an economic unit – such as a society, a
business, a person – is nor doing but could be doing.
10.Choosing any scarce thing sets a limit to other choices.
11.Scarcity limits us both as individuals and as a society.
Exercise 9. Pair the halves of the sentences. Write your own list of the completed
sentences and translate them into Ukrainian.
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7. Since people’s values differ, g. there will be no economic problem.
8. Without scarcity, h. choices and opportunity costs.
9. The opportunity cost of government i. giving up a little bit of many others.
spending on a particular program is
10.No matter how much we have, we j. the opportunity cost of the same
face scarcity - decision may differ from person to
person.
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2. This value is unique for each ________________________________________
individual. ________________________________________
3. You may, for instance, forgo ________________________________________
ice cream in order to have an ________________________________________
extra helping of mashed potatoes. ________________________________________
4. For you, the mashed potatoes ________________________________________
have a greater value than dessert. ________________________________________
5. But you can always change ________________________________________
your mind in the future because ________________________________________
there may be some instances ________________________________________
when the mashed potatoes are just ________________________________________
not as attractive as the ice cream. ________________________________________
6. The opportunity cost of an ________________________________________
individual's decisions, therefore, ________________________________________
is determined by his or her needs, ________________________________________
wants, time and resources ________________________________________
(income). ________________________________________
Exercise 12. Translate the sentences into English using the active vocabulary.
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бажань. __
_______________________________________
_
4. У світі нестачі неможливо _______________________________________
отримати щось безкоштовно. _______________________________________
5. Кожен стикається з пробле- _______________________________________
мою обмежених ресурсів, щоб _______________________________________
задовольнити свої бажання та _______________________________________
потреби. _______________________________________
__
6. Поняття “альтернативна _______________________________________
вартість” стосується як окремих _______________________________________
осіб, так і підприємств та уряду. _______________________________________
_
7. Проблема нестачі, вибору та _______________________________________
альтернативної вартості – це _______________________________________
важливі економічні проблеми, які _______________________________________
постають перед будь-якою _______________________________________
господарською одиницею. _______________________________________
___
8. Оскільки люди не можуть собі _______________________________________
дозволити мати все, вони змушені _______________________________________
робити вибір серед речей, які _______________________________________
вони хотіли б. _______________________________________
__
9. Оскільки людські бажання _______________________________________
необмежені, а ресурси наявні для _______________________________________
їх задоволення обмежені, ми _______________________________________
повинні робити вибори щодо _______________________________________
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того, як використовувати ці ______________________________________
ресурси. ______________________________________
10.Існує межа кількості наявних _______________________________________
ресурсів, але не існує межі _______________________________________
людським бажанням. ______________________________________
11.Альтернативна вартість пев- _____________________________________
ної речі – це вартість того, від _____________________________________
чого ми змушені відмовитись, _______________________________________
щоб отримати саме цю річ. _______________________________________
12.Рішення мати якусь річ є в той _______________________________________
же час рішенням не мати чогось _______________________________________
іншого. ______________________________________
13.Особистий прибуток, заощад- _______________________________________
ження, спроможність брати в борг ______________________________________
впливають на вибір, який роблять ______________________________________
люди. ______________________________________
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10. Why cannot individuals, businesses and governments afford to have all the things
they would like to have?
11. Why does scarcity force all decision makers to arrive at best decisions?
12. How do economists explain the essential sense of scarcity?
13. What is the opportunity cost?
14. What is its essential sense?
15. What is the money cost of going to university?
16. What are forgone earnings?
17. Why do anyone who goes to university face the opportunity cost? What costs do the
opportunity cost involve? Why does the cost of doing something have nothing to do with
spending money in most cases?
18. Why should people compare benefits before making their decisions?
19. Why does the cost of doing something have nothing to do with spending money in
most cases?
20. Why should people compare benefits before making their decisions?
21. What are the two sides of opportunity cost?
22.What is the relationship among scarcity, choice and opportunity cost?
In economics there is a saying: "There's no such thing as a free lunch". It means that
nothing is really "free" because we use resources that could have been used for
something else. We live in a world of scarce resources and unlimited wants. The concept
of scarcity is essential to the field of economics. With scarcity come choices. Economics
deals with how people and society make choices under conditions of scarcity, as well as
the individual and social consequences of these choices. Economics is concerned with
the analysis of this decision-making process. To make efficient decisions - decisions that
provide the greatest possible earnings from the resources available -, people and society
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must consider the benefits and costs of using their resources to get more of some things,
and less of others. The reality is that we cannot have everything that we want. We must
choose which of our desires we will meet and which we will leave unsatisfied. So, faced
with scarcity, individuals, government and society must make choices.
Choosing any scarce thing sets the limit on other options. To the economist such
foregone options are opportunity cost. Suppose you drive a car. Buying an extra gallon
of gasoline may prevent you from buying an extra piece of pizza, but purchasing the
pizza instead of the gas may force you to drive less and walk more. Economists view
opportunity cost as the value of the next best option forgone when a choice is made.
You make different choices every day as well. Choices involve a trade-off of the value
of one opportunity against the value of its best alternative. Are there any additional
benefits and costs of studying economics rather than listening to music or meeting
friends, or sleeping? Is watching TV the best use of your time? Is working at a fast-food
restaurant better than the best alternative job or some other use of your time? Will you
graduate the university? (Potential benefits include higher lifetime income, meeting
interesting people, and the joy of learning; costs include expenditures for tuition, books
and different supplies, the hard work in classes, and the income you could be making
right now.) Where will you live and work? Will you marry? (Marriage involves both
financial and psychological costs and benefits.) Will you have children? If so, how
many? How will you spend your limited income? Decisions about these and other
economic choices will create the course of your life.
For most people opportunity cost is measured by the money paid to produce or acquire
goods, but opportunity cost is ultimately personal and involve far more than money
alone.
Have you ever estimated the cost of your education? Consider the value of your time.
Instead of studying and attending class, you could get a full-time or part-time job. You
may be giving up better food and clothes, a nice car, and a comfortable apartment. The
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values of all forgone alternatives are the true costs of education. But suppose you quit
school. The costs of your nice car, apartment, food, and clothing would include the
forgone enjoyment of learning and campus life, and the higher future income and
consumption your university degree might have made possible.
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3. If you happen to drop out of the university, what things will change in your life?
What, then, is the opportunity cost of your education?
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4. What is the difference between scarcity and poverty? If everyone in the world had
enough to eat, could we say that food was no longer scarce? Can the problems of
scarcity and poverty be solved?
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_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
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d. Resources are limitless but human wants are scarce.
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d. Opportunity cost is a monetary measure of cost that takes into account only
explicit costs (явні витрати), or costs that can be counted.
8. The following is a rank ordering of how Ann would prefer to spend her time this
evening: (1) study economics, (2) go to a concert, (3) do laundry, and (4) exercise. If
she chooses to study economics, what is the opportunity cost of studying?
a. The benefits she forgoes by not going to the concert.
b. The sum of going to a concert, doing her laundry, and exercising.
c. Zero.
d. None of the above.
10.Economics is a social science that studies the choices that individuals, businesses,
governments, and entire societies make in the presence of
a. scarcity.
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b. necessity.
c. efficiency.
d. poverty.
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